Stakeholders in Nigeria’s oil and gas industry have expressed concern over the Federal Government’s refusal to grant consent to Seplat Energy’s proposed acquisition of Mobil Producing Nigeria Unlimited (MPNU), warning that the decision could send negative signals to prospective investors and undermine confidence in the sector.
Concerns Over Investment Climate in Nigeria’s Oil and Gas Sector
Stakeholders have warned that the government’s position suggests that new investors may not be welcome in Nigeria’s oil and gas industry.
Gbite Adeniji, a legal expert at ENR Advisory, raised this concern while speaking at the launch of From Oloibiri to Bonny, a book written by Godswill S. Ihetu, former Managing Director of Nigeria Liquefied Natural Gas (NLNG) and Group Executive Director at the Nigerian National Petroleum Corporation (NNPC). Adeniji cautioned that Nigeria risks missing out on opportunities emerging from the global gas revolution, much like it did with crude oil.
Other stakeholders who spoke to Business Standards echoed his position, arguing that the government’s action indicates either reluctance or resistance to new entrants in the sector.
According to Adeniji, the Seplat-MPNU deal represented a significant opportunity to boost investment and strengthen the industry. He noted that “great opportunities in the past that would have moved the oil and gas industry to a higher level and increased government revenues have been carelessly allowed to slip from the country’s hands due to lack of vision.”
Adeniji, who previously served as technical adviser to former Minister of State for Petroleum Resources, Emmanuel Kachukwu, added that Nigerians should be concerned about developments in the sector. He pointed to the Russia–Ukraine war as a moment of strategic opportunity, with Europe seeking alternatives to Russian gas—an opening Nigeria could capitalise on.
Some stakeholders also argued that Seplat Energy was acquiring the corporate entity MPNU rather than the joint venture assets, and therefore questioned the basis for the government’s refusal.
Regulatory Position and Government Justification
The Federal Government declined consent for Seplat Energy’s proposed acquisition of MPNU’s oil and gas assets, citing overriding national interest among its reasons.
Gbenga Komolafe, Chief Executive of the Nigerian Upstream Regulatory Commission (NUPRC), conveyed the decision in two letters dated May 13, 2022, addressed to MPNU Chairman/Managing Director Richard Laing and Seplat Energy’s then Chairman, Dr. ABC Orjiako.
Seplat Energy Plc had announced the acquisition in February 2022, subject to ministerial consent and regulatory approvals. However, shortly after, the Nigerian National Petroleum Company (NNPC) Limited exercised its Right of First Refusal (RFR), placing the transaction on hold.
In his correspondence, Komolafe emphasised that regardless of how the transaction was structured, MPNU remained the assignor under Nigerian law.
“We also note that MPNU failed to follow the procedure for assignments laid down in the Guidelines by not providing the requisite notices to the Commission at all relevant stages of the transaction,” he stated. He added that even if the transaction was between Seplat Energy Offshore Limited and MPNU shareholders, compliance responsibility remained with MPNU.
Komolafe confirmed that the Minister of Petroleum Resources had declined consent, noting that the Commission retained all its rights under applicable laws and guidelines.
In a separate letter to Orjiako, the Commission reiterated that MPNU, as the assignor, was the proper party to seek ministerial consent, advising Seplat to revert to MPNU for updates on the application.
How Asset Acquisitions Are Approved Under Nigeria’s Post-PIA Regime
The approval of asset acquisitions in Nigeria’s upstream oil and gas sector is governed primarily by the Petroleum Industry Act (PIA) 2021, supported by detailed regulatory guidelines issued by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
At the core of the framework is the requirement for Ministerial Consent. Under the PIA, no holder of a petroleum prospecting licence (PPL) or petroleum mining lease (PML) may assign, novate, or otherwise transfer its interest—whether wholly or in part—without the prior approval of the Minister of Petroleum Resources.
Importantly, the law goes beyond traditional asset sales. It provides that a change of control—including the sale of shares in a company holding upstream assets—constitutes an assignment requiring regulatory approval. This provision has become central in transactions structured as corporate acquisitions rather than direct asset transfers.
The process itself is administered by the NUPRC, which serves as the technical regulator. Applications are submitted to the Commission, which reviews the transaction and makes a recommendation to the Minister. The PIA establishes defined timelines: the Commission is expected to act within 60 days, and the Minister within a further 60 days. Where the Minister does not communicate a decision within the statutory period, consent may be deemed to have been granted.
In evaluating applications, the law sets out clear criteria. The proposed acquirer must be a company incorporated in Nigeria, demonstrate technical competence, financial capability, and a satisfactory compliance and operational track record, and meet applicable competition requirements under Nigerian law. These statutory tests are central to the regulatory assessment.
Beyond the PIA itself, the process is shaped by the Commission’s Guidelines for Obtaining Ministerial Consent (2021) and more recent Assignment of Interest Regulations (2024). These instruments set out procedural requirements, including notifications at various stages of a transaction, submission of detailed transaction documentation, and regulatory due diligence on both the asset and the parties.
In practice, the application process is typically driven by the current asset holder (assignor), which remains responsible for ensuring compliance with Nigerian law and regulatory procedures. However, the PIA makes clear that transactions involving shareholders—particularly in incorporated joint ventures—also fall within the consent regime, reflecting a broader approach to regulating changes in control.
Another important dimension is the role of contractual rights within joint operating agreements (JOAs) and production sharing contracts (PSCs). These may include rights of pre-emption or consent rights held by partners, including the Nigerian National Petroleum Company (NNPC) Limited. Such rights are not created by statute but can materially affect the timing and structure of transactions.
Taken together, Nigeria’s post-PIA framework represents a more structured and codified system for approving upstream transactions. However, the interaction between statutory requirements, regulatory discretion, and contractual rights means that outcomes continue to depend not only on compliance, but also on how transactions are structured and sequenced.
